AirTran/Jet Connect & Scope

[avrodriver]

I know there is scope written into the current contract just don't know any of the details. If anyone knows any info I'm very interested in the potential growth of the Jet Connect side of things and just how much it may possibly be limited. I've heard 10 planes to start, with possiblity of 20 or 30, but I am interested in what the contract actually says in regard to this. Thanks ahead of time! AD

 

[Ty Webb]

Sorry, don;t have my contract with me, but I believe the scope is 12% of ASM . . . and can go to 18% under certain conditions, but, again, I am not positive.

Our CEO Joe Leonard has said that we are using 10 initially. The will be used for smaller markets that are not producing load factors warranting the 717's (117 pax seats), which is OK with most of the pilots here, because we are growing, not shrinking, so it brings more people into our system and allows us to defend against some of "Big D's" tactics. We may also use them to go back into markets that we had exited due to lower loads.

Oddly enough, when asked about the economics of the RJ's versus the B717,Mr. Leonard said that the only advantage in using RJ's is in the cost of the pilots . . . that the B717 was actually more cost effective than the RJ's, on a cost/seat-mile basis.

I have jumpseated on the RJ's quite a few times, and the crews have been very professional and do a great job of representing "our" company to the customers. I just wish we were operating them out of "C" concourse . . . .

 

[flx757]

Ty,

I do have the contract in front of me, and the percent of ASMs are tied to the number of aircraft that AirTran operates. The greater the number of aircraft AirTran has, the greater the percent of ASMs allowed. It ranges from 17.5% to 20%. Based upon the current fleet (as of Jan, '03) of 63 aircraft, the percent would be 18%. The 20% doesn't kick in until the fleet is larger than 100 aircraft.

Also, there is a provision that if the level of company operations, based on block hours, is not increasing, measured on an annual basis, then the amount of ASMs performed by all commuter or express carriers is limited to 75% of the total set forth above.

While I suppose there is always some cause for concern with these types of arrangements, we are still expanding at the rate of 25% per year; and are taking delivery of 23 additional 717s this year, and will be introducing a larger/longer range aircraft in the coming months. As is stands today, this arrangement allows us to continue to expand, and to quickly take advantage of various market opportunities that might not otherwise be available.